Saturday, April 15, 2006

FY 2006 Wal-Mart financial statements - Part One

The first thing I always look for when viewing a new set of annual financial statements from Wal-Mart is how did things change due to restatements or reclassifications?

Reclassifications happen for example when Wal-Mart buys or sells a business. The sale of McLane is the most recent historical example. (In FY 2004, Wal-Mart sold McLane to Berkshire Hathaway and so McLane’s assets and liabilities were removed from Wal-Mart’s balance sheet.)

Let’s quickly look at what happened in FY 2006…

The main thing that occurred was the consolidation of Seiyu (Japan) and Sonae Distribuicao (Brazil) onto Wal-Mart’s balance sheet. This consolidation happened for FY 2006.

I noticed, though, that numbers also changed on the FY 2005 balance sheet.

Wal-Mart notes that “Certain reclassifications have been made to prior periods to conform to current presentations.” I wish we had a better explanation of what happened, though. I always like to keep everything neat and tidy.

The 2005 balance sheet changed in the 2006 10-K, but I guess since the change was small enough it was considered immaterial and did not require specific explanation. Inventory increased by 315 million on the left side of the balance sheet offset by a similar increase in accounts payable on the right side …Did a percentage of Seiyu’s balance sheet and a percentage of Sonae Distribuicao’s balance sheet get applied to FY 2005? I guess we won’t know. All I can do is just post spreadsheets of the restatements before moving on.

2006 Restatements for FY 2005

    Restated 2005 Wal-Mart Balance Sheet
    Restated 2005 Wal-Mart Income Statement
    Restated 2005 Wal-Mart Cash Flow Statement

2006 newly updated Financial Statements

    2006 (multi-year) Wal-Mart Balance Sheet
    2006 (multi-year) Wal-Mart Income Statement
    2006 (multi-year) Wal-Mart Cash Flow Statement